Official Opinion 2007-5

A county may not borrow from countySpecial Purpose Local Option Sales Tax (SPLOST) proceeds to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes.

You have asked whether it is permissible for a county to borrow from countySpecial Purpose Local Option Sales Tax (hereafter SPLOST) proceeds in order to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes. See O.C.G.A. §§ 48‑8‑110(1) and 48‑8‑111.

In pertinent part the statute governing the use of SPLOST proceeds provides as follows:

The proceeds received from the tax authorized by [O.C.G.A. § 48‑8‑111] shall be used by the county . . . exclusively for the purpose or purposes specified in the resolution or ordinance calling for imposition of the tax. Such proceeds shall be kept in a separate account from other funds of such county . . . and shall not in any manner be commingled with other funds of such county . . . .

O.C.G.A. § 48‑8‑121(a)(1) (emphasis added).

The Georgia Supreme Court has had occasion to construe the statutory provision set out above in a number of cases. In each such case, the court strictly construed the statutory language with regard to the permissible uses of SPLOST funds. SeeJohnston v. Thompson, 280 Ga. 611 (2006) (county may not use funds from SPLOST imposed to make school system wide technology improvements to provide lap top computers to all middle and high school students); Haugen v. Henry County, 277 Ga. 743 (2004) (county may not identify any SPLOST funds as “excess” until all projects called for in the resolution are complete); Dickey v. Storey, 262 Ga. 452 (1992) (county may not change the site specified in the resolution calling for the imposition of the tax for the purpose of building a government office and center complex).

In addition, in responding to a question regarding the permissible uses of interest accrued on an account maintained to account for SPLOST revenues, I have previously opined that the statutory restrictions set out above require that all accrued interest on the separately maintained SPLOST account also be used exclusively for the approved projects and likewise kept in the separate account maintained for SPLOST revenues. 2001 Op. Att’y Gen. 2001-3.

The plain language of the statute as well as prior construction of statutory language regarding the use of SPLOST funds requires that the SPLOST funds be kept in an account separate from other county funds and withdrawn only for the payment of expenses incurred with regard to the projects approved in the resolution or ordinance calling for the imposition of the tax.

Therefore, it is my official opinion that a county may not borrow from county SPLOST proceeds to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes.